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Lilly Ledbetter Fair Pay Act Restores Discovery Rule to Pay Discrimination Cases

In one of the first strokes of his pen since his election, President Obama signed the Lilly Ledbetter Fair Pay Act of 2009. The effect of this legislation was to reverse the U.S. Supreme Court decision in the case of Ledbetter v. Goodyear Tire & Rubber Co., Inc.

That case reversed a judgment in favor of Ledbetter, which she had won after discovering her employer had been giving her unequal pay for over nineteen years.  Although she had been a very productive employee for those nineteen years, Goodyear paid Ledbetter less than the comparable male employees doing similar work. As she was retiring, Ledbetter was informed that this pay discrimination had been on-going for as long as she had worked for Goodyear.  At trial, a jury found that Goodyear was liable for discrimination, and awarded Ledbetter damages. But the Supreme Court reversed the judgment, reasoning in its split (5-4) decision that Ledbetter should have filed her suit 180 days after the first act of discrimination.

The lower courts had consistently held that the 180 day requirement began to run only after the employee had discovered the discriminatory act (commonly known as the “discovery rule”). The Supreme Court upended the discovery rule.  The Lilly Ledbetter Fair Pay Act restores the discovery rule to pay discrimination claims.

The Act also applies to race, gender, color, religious, and national origin claims under Title VII; to age discrimination claims under the Age Discrimination in Employment Act; and handicap discrimination claims under the Americans with Disabilities Act.

Two other aspects of the Act are of importance:  The Act allows employees to claim back pay for a period of up to two years prior to the filing of the claim with the Equality Employment Opportunity Commission. The Act is also retroactive, with an effective date of May 28, 2007.  The Act does not restore the damages awarded to Ledbetter in her case.

What Should Employers Do? Discrimination in its many forms is, of course, illegal. Each unequal paycheck will constitute a separate violation, and employees will have 180 days to file their claims once the acts are discovered.  If you are in doubt about the pay practices of your company, you should promptly consult an experienced employment attorney to address those issues.

Americans with Disabilities Act Update

On September 25, 2008, President Bush signed a bill amending the Americans with Disabilities Act (the “ADA”).  The ADA Amendment Act (“ADAAA”), as it is now known, is effective as of January 1, 2009.  The non-discrimination standards articulated in the ADAAA apply to all employers with fifteen employees or more and extends the protection of these standards to a broad array of individuals.

Substantive Amendments and Related Criteria to Establish a Disability

The ADAAA set forth two lists which illustrate the non-exhaustive examples of disabilities protected by the law.  The changes included in the ADAAA are sweeping.  While it acknowledges the recognized “Major Life Activities” of walking and breathing, the ADAAA expanded its protection to other major life activities such as reading, bending, and communicating, thereby dramatically increasing the likelihood of claims.  And, for the first time, the law acknowledges the category of “Major Bodily Functions” to which its protection extends.  This list includes functions of the immune system, normal cell growth, digestive systems, bowel, bladder, neurological, brain, respiratory, circulatory, endocrine, and reproductive functions.  In short, under the expanded definitions of the ADAAA, few, if any, ailments will not be protected.

The ADAAA explicitly rejects judicial attempts to narrowly define the type of disabilities protected by law and reaffirms its commitment to expand protection from discrimination.  Consequently, the “Mitigating Measures” defense, first articulated by the United States Supreme Court in Sutton v. United Airlines is no longer a viable defense.  Similarly, the law rejects the standard established by Toyota v. Williams which analyzed the measure of “substantial limitations” on a major life activity.  To the extent that the Williams’ standard set too high a threshold of entitlement, the ADAAA lowers that threshold to extend protection. Further, the Act provides that a disability in remission or which is episodic in nature is protected, if it would be so when active.

As a result of multiple interpretations and by state and federal courts, the Act broadens the “regarded as” definition to include protection because of actual or perceived impairment, unless that impairment was transitory or minor in nature.  Note that this protection extends to the broader category of impairment, which is substantially different from an actual disability.  Individuals covered under the “regarded as” protection of the law are not entitled to a reasonable accommodation.  They are limited to anti-discrimination damages alone.

At present, there is no interpretive guidance available despite the ADAAA’s directive to the Equal Employment Opportunity Commission (“EEOC”) to develop such guidelines.  The Act specifically requires that the EEOC develop interpretive guidelines, but it did not require a timeline in which it must to complete the task.  In December of 2008, the EEOC Commissioners who were tasked with developing these guidelines reached a stalemate, effectively resulting in no guidance for the implementation of the Act.  Employers, therefore, should adopt a conservative approach to all claims and ensure that they strictly adhere to the procedural mandates of the ADAAA

Psychological Disabilities

The ADAAA affords protections to individuals who suffer psychological disabilities which impact major life functions.  And, as with physical limitations, the ADAAA also extends the protection of the anti-discrimination law to those who possess mental impairments.  Examples of psychological disabilities which affect major life activities are major depression, bipolar disorders, schizophrenia, anxiety disorders, and post-traumatic stress syndrome.  In addition, the Act extends to those who are not only “regarded as” having disabilities, but also individuals “regarded as” having mental impairments, regardless of whether or not they affect any major life activities.

What Should Employers Do? On January 1, 2009, the ADAAA became law.  And, because there are no guidelines currently in effect from which employers could assess their obligations and potential liability, it is reasonable to assume that the number of claims should increase dramatically.  The prudent course of action in response to the dirth of guidance would be for employers to redirect their focus from determining whether or not an employee is disabled under the law.  Rather, employers should focus on compliance with the obligations imposed under the ADAAA by engaging in the interactive process, attempting to provide reasonable accommodation, and developing strategies to educate its managers and Human Resources professionals to ensure consistent compliance.

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